What the papers said about older borrowers

Published 20/01/2016

With the UK population living longer and working later in life, it comes as no surprise that our mortgage requirements are also beginning to change. It is estimated that by 2034 17 million people, or 25% of the population, will be aged 65 and over, and that will mean more borrowers with a mortgage beyond standard retirement age

The Sunday Times reported this weekend that, despite these numbers, many high street lenders have been slow to react, and still typically cap their maximum lending age even when a borrower can show the mortgage is affordable. There is some good news however, with a number of smaller building societies scrapping their upper age limit in favour of a case by case approach.

Elsewhere, both the Guardian and Telegraph gave tips on re-organising debt, as we take stock of our finances post-Christmas. With interest rates currently at rock-bottom, one option is to add debt to the mortgage, although mortgage brokers warned that lenders can be more restrictive where consolidation is involved than they would be if a borrower was increasing their mortgage to carry out home improvements. Most, for example, will insist there is at least 15% equity in the property.

Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.

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Representative example A mortgage of £190,596 payable over 22 years, initially on a fixed rate until 30/04/23 at 1.65% and then on a variable rate of 4.90% for the remaining 17 years would require 63 payments of £860.92 and 201 payments of £1102.66. The total amount payable would be £277,868 made up of the loan amount plus interest (£85,277) and fees (£1,995). The overall cost for comparison is 3.6% APRC representative.

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